FILE SHARING & LIABILITY




individual liability

Copyright law allows individuals to copy music from a CD that they purchased to a cassette or computer hard drive for personal use. Individuals are also entitled to make an archival copy of a CD or download the music to an MP3 player without engaging in copyright infringement. It may even be permissible to download a copy of a song that you have on a purchased CD, though courts have not come to a clear decision on this topic. What is clear is making a copy of a CD or DVD to give (or sell) to a friend or making the CD available through a peer-to-peer (P2P) network infringes on the rights of the copyright holder and is always a violation of the Copyright Act.

Individual utilization of file sharing
The opportunities for individuals to use file sharing are nearly endless; any time information needs to be exchanged, file sharing can be utilized. There are three primary categories in which file sharing is essential: entertainment, education, and employment. The legality of the use of file sharing in any of these areas turns on what is being shared and whether the individual had obtained permission from the copyright owner to share the information.

Entertainment
Entertainment is the field that most commonly comes to mind when discussing file sharing. File sharing can be used to create interest in a new band or allow a fan to get the latest single from a chart-topping artist. It can be used by a film student who is trying to create interest in his movie or a movie-buff who wants to see the trailer for a highly anticipated film. It can be used to share family photos or allow a wedding photographer to deliver on his contract. The majority of the information in this portion of the website will discuss liability arising from the use of file sharing to distribute entertainment materials.

Education
Communication of information is at the heart of education, so the use of file sharing is a natural extension within the field. File sharing can be used to assign and turn in projects, share insight and ideas, or engage in distance learning.

Employment.
File sharing makes cyber-commuting possible in the employment realm. Without the ability to easily transfer large quantities of information, workers would be unable to be an efficient part of the company from their home computer.

How does an individual become liable for his activities?
An individual becomes potentially liable for his file sharing activities when he shares copyrighted information in violation of U.S. Copyright Law. Both the Recording Industry Association of America (RIAA) and the Motion Picture Association of America (MPAA) have sued individuals engaged in sharing copyrighted materials over the Internet for violations of U.S. Copyright Law. In order to be sued, the alleged infringer must first be tracked down.

Tracking down an infringer
Both the RIAA and the MPAA use an automated web crawler to inspect the Internet for copyright infringements.
The digital fingerprints of each file can be use to identify a pirated song or movie.
The industries use a collection of digital fingerprints (hashes) that uniquely identify copyrighted files traded over file sharing services.
The RIAA or MPAA compares the hash of a music file on the infringer’s computer to those in its collection to determine whether the file originated from a CD or DVD or a file-sharing service.
The industries are also exploring concealed bits of information (called “metadata” tags) within many copyrighted files to find evidence of other Internet users. Such evidence increases the possibility that the file was traded over the Internet and not just copied from the suspected infringer’s own CD.

These methods allow the RIAA or MPAA to identify the infringing IP address, by not the name and address of the individual responsible for the violation. To gain that information, the associations turn to the power of the DMCA.

DMCA Subpeona Power
The DMCA allows a copyright holder or authorized representative to request a subpoena from a clerk of court. When making the request for the subpoena, the RIAA or MPAA, as an authorized agent, must include:
A copy of the notification of the copyright infringement as provided to the internet service provider.
The proposed subpoena.
And, a sworn statement that the information sought will only be used to identify the infringer and protect the rights of the copyright holder.

The copyright holder or authorized representative can utilize to subpoena to learn the identity of an alleged infringer, and the individual responsible for the copyright violation can be tracked down and punished for the infringement.

The ease of this process has all but been eliminated with the recent decision in Verizon v RIAA. In that case, the court decided that, where the Internet service provider merely serves as a conduit for information, it is impossible for the copyright holder to meet all of the DMCA provisions for obtaining a subpoena from the clerk of court. Where the ISP is merely a conduit for information, the copyright holder cannot show that a notice of infringement and request that the material be removed (notice and takedown) was even given (since the ISP would not have the power to remove such material). Copyright holders can still obtain identifying information about infringers, but they now have to file John Doe suits to do so. In January of 2004, the RIAA filed more than 500 John Doe suits in an effort to identify copyright infringers.

Tracking down individual infringers is both time consuming and expensive. Despite the difficulties, the RIAA has filed lawsuits against more than 5,400 individuals. Once those lawsuits have been filed, what will happen to the infringers?

What punishments might an individual face?
Two options exist for copyright holders seeking damages in an infringement case:
Actual damages plus any profits the infringer received in violating the copyright or
Statutory damages of $750 to $30,000 per copyrighted work involved in the case, though the maximum can be increased to $150,000 for willful infringement and
Costs and attorney’s fees

In cases brought by the RIAA or MPAA, statutory damages have been sought because it is unnecessary for the copyright holder to prove actual monetary losses or damages. It is easy to imagine how large a damage sum can become, given that the majority of individuals sued have shared at least 1000 copyrighted works. Clearly, statutory damages have a punitive effect, and some have gone so far as to argue that statutory damages in copyright infringement cases are unconstitutional.

In order to establish a willful copyright violation, the finder of fact will assess whether the infringer knew or had reason to know or recklessly disregarded the fact that their activities constituted copyright infringement. Given the pubic education campaign undertaken by copyright holders, a defendant would be hard pressed to argue that they did not know about the unlawfulness of their file-sharing activities. If the copyright infringement was innocent, then there is potential for damages to be reduced, but innocent infringement is hard to prove.

To date, no case brought by the RIAA or MPAA has reached the point of damage calculation. Of those individuals sued by the RIAA, about 1,100 have settled their cases for about $3,000 each, far less than their potential exposure for the illegal activity.

Copyright infringers are also potentially exposed to criminal penalties for their activities. Infringers can be subject to up to 5 years in prison and $250,000 in fines. Repeat infringers might face up to 10 years in prison.

How Does an Individual Avoid Liability?
The FTC warned consumers about the risks of online file sharing. Anyone who shares copyrighted material potentially faces liability. Therefore, common sense would suggest that in order to avoid liability a person should not distribute material known to be copyrighted.

Fair Use
The fair use doctrine provides a potential defense to copyright infringement. Time shifting of broadcast television is fair use. Space shifting (moving information from one format to another) is also suggested to be fair use in some situations. Moving a CD onto a web site so that if could be heard via the web was deemed to not be permissible fair use in UMG Recordings, Inc v MP3.com, Inc. It has yet to be determined whether downloading a song that you already own to make a space shift more convenient constitutes fair use. Downloading a CD for educational purposes appears to be fair use.

Private P2P Networks
A new trend has surfaced in the use of private peer-to-peer networks (as opposed to public P2Ps like Kazaa or Morpheus). Private P2Ps allow file sharing to take place between a group of individuals that all know each other. These private networks are used for everything from sharing photos between friends and family to sharing documents with fellow employees. Private P2Ps allow the users to feel more comfortable in that the information they are sharing is what it purports to be and there is no need to worry that their data might be captured by a trespasser. While sharing copyrighted material is still against the law, individuals might be able to utilize private P2P networks to stream audio files to a few users without encountering the prohibitions in the DMCA.

Amnesty
The RIAA has created an amnesty program for users of file sharing networks. If the user agrees to cease all illegal file-sharing activity, the RIAA agrees to give that user immunity from litigation. The program is not available to those individuals who are currently the subject to lawsuits. Furthermore, it does not protect users from litigation with non-RIAA copyright owners.

 

hot topics

• Informal file sharing may have advantages for users. Click here for yahoo news story.

• Self Help for Copyright Holders.
CD technology: disc embedded protection
Secure Digital Music Initiative: watermark, effectively causing P2Ps to reject copyrighted material
Spoof MP3
P2P monitoring

for more information
Edward Hernstadt, File-Sharing Liability: What Employers - and Parents - Need to Know.
17 USCS § 501 (2005).
• J. Cam Barker, Grossly Excessive Penalities in the Battle Against Illegal File-Sharing: The Troubling Effect of Aggegating Minimum Statutory Damages for Copyright Infringement, 83 Tex. L. Rev. 525, (Dec 2004).
• In Re Aimster Copyright Litigation, 334 F.3d 643 (7th Cir. 2003)
• Elliot M. Zimmerman, P2P File Sharing: Direct and Indirect Copyright Infringment, 78 Fla. Bar J. 40 (May, 2004)
Jack C. Schecter, “Soundbyting: Examining MP3 Piracy at Universities”, 2000 B.C. Intell. Prop. & Tech. F. 032101.
• Ted Bridis, Music Industry Unveils Tracking Methods, Yahoo.com (Aug. 28, 2003).
17 U.S.C.S. § 512 (2005).
• Alice Kao, RIAA v Verizon: Applying the Subpoena Provision of the DMCA, 19 Berkeley Tech. L. J. 405 (2004).
• Rick Massimo, The Lowdown on Downloading, The Providence Journal, Arts section, page c-01 January 2, 2005.
Michael J. Remington, Background Discussion of Copyright Law and Potential Liability for Students Engaged in P2P File Sharing on University Networks.
17 U.S.C.S §107 (2005).
• Richard Swope, Peer-to-Peer File Sharing and Copyright Infringement: Danger Ahead forIndividuals Sharing Files on the Internet, 44 Santa Clara L. Rev. 861 (2004).
• P2P Goes Private, Cade Metz, PC Magazine, p92, Feb 8, 2005.
• Jacob Weiss, Harmonizing Fair Use and Self-Help Copyright Protection of Digital Music, 30 Rutgers Computer & Tech. L. J. 203 (2004).
Michigan RIAA Defense: Parental Liability.


Information on this website was last updated on April 19, 2005.
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